OIG and CMS Issue Rule: Finalizing Fraud and Abuse Waivers for MSSP ACOs

29 October 2015 Health Care Law Today Blog
Author(s): C. Frederick Geilfuss II

The Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) of the Department of Health and Human Services just issued a final rule setting forth waivers of specified fraud and abuse laws applicable to the Medicare Shared Savings Program (MSSP). The final rule replaces the Interim Final Rule (IFC) with comment (IFC) that was issued on November 2, 2011. The IFC had been set to expire on November 2, 2015; the final rule is effective immediately and does not expire.

The final rule predominately continues the waivers contained in the IFC. One change is that the final rule eliminates the waiver of the Gainsharing Civil Monetary Penalty Law (Gainsharing CMP), which law (found at 42 U.S.C. 1320, 7a(b)(1) and (2)) makes it illegal for hospitals to knowingly make payments directly or indirectly, to induce a physician to reduce or limit medically necessary services to Medicare or state health program beneficiaries under the physician’s direct care. The IFC had created a waiver at a time when the “medically necessary” language was not included in the Gainsharing CMP statute and the wavier had protected arrangements only so long as services not medically necessary were involved. Since the Gainsharing CMP statute has now been amended to add “medically necessary” services to the text, the Gainsharing CMP waiver was viewed as no longer needed.

The other revisions to the IFC in the final rule are less substantive. They include:

  • Changing “should” to “must” in the fourth condition to Pre-Participation and Participation Waivers. This change will now require an ACO’s governing body’s documentation of its authorization of an arrangement to provide the basis for the determination that the arrangement is reasonably related to the purposes of the MSSP.
  • Clarifying what “home health supplier” means under the IFC. Home health suppliers are not eligible for waiver protection under the Pre-Participation Waiver, which generally applies to start-up arrangements. The final rule clarifies that a home health supplier is an entity that is primarily engaged in furnishing home health care services.

With the final rule, there will be five applicable waivers from the covered fraud and abuse laws for MSSP ACOs. The waivers are:

  • ACO Pre-Participation Waiver
  • ACO Participation Waiver
  • Shared Servicing Distribution Waiver
  • Compliance with Physician Self-Referral Law Waiver
  • Patient Incentive (Beneficiary Inducement) Waiver

The waivers provide MSSP ACOs and their participants with broad protection against specified fraud and abuse laws if all the conditions to the waivers are met. The conditions, however, must be satisfied and documented as required. There had been some concern that the waivers may be limited in some particulars in the final rule, but CMS and OIG have determined that the included conditions provide adequate safeguards, and that the waivers are important to the functioning of ACOs participating in the MSSP.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services